By a 6-3 vote issued today in the case of King v. Burwell, the US Supreme Court upheld the subsidies for health insurance provided by the federal exchanges in those states that decided to not set up state exchanges. This will come as a huge relief to the Obama administration’s signature legislation. But more importantly, it will enable about 10 million people to continue to get affordable health care coverage.
You can read the full opinion here. In writing the majority opinion, Chief Justice Roberts (joined by Kennedy, Ginsburg, Kagan, Breyer, and Sotomayor) applied the kind of common sense position that supporters of the law had made, that in the case of ambiguity, the intent of the legislation took precedence.
When analyzing an agency’s interpretation of a statute, we often apply the two-step framework announced in Chevron, 467 U. S. 837. Under that framework, we ask whether the statute is ambiguous and, if so, whether the agency’s interpretation is reasonable.
The tax credits are among the Act’s key reforms, involving billions of dollars in spending each year and affecting the price of health insurance for millions of people. Whether those credits are available on Federal Exchanges is thus a question of deep “economic and political significance” that is central to this statutory scheme; had Congress wished to assign that question to an agency, it surely would have done so expressly.
It is instead our task to determine the correct reading of Section 36B. If the statutory language is plain, we must enforce it according to its terms. But oftentimes the “meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.” So when deciding whether the language is plain, we must read the words “in their context and with a view to their place in the overall statutory scheme.”
After analyzing the context and the various places in which the exchanges were mentioned, he argues that treating the federal and state exchanges as fundamentally different for the purposes of subsidies would be inconsistent. He also found convincing the argument that denying the federal subsidies would create chaos in the private health insurance markets.
Given that the text is ambiguous, we must turn to the broader structure of the Act to determine the meaning of Section 36B. “A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme . . . because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.”
Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.
The vote may be secretly welcomed by the Republican party leadership in Congress and by governors in Republican-dominated states that had loudly opposed Obamacare and later realized that eliminating the federal subsidies might result in a major backlash, since most of the people who would lose coverage are in Republican states. But this decision, and the fact that it was by an even larger majority than the earlier Obamacare ruling, will be a bitter blow to Tea Partiers, Fox News, and many Republicans who had seemed confident that they would win.
What form the reaction of these groups will take will be interesting to see. They are not known for their restraint and we may even hear calls for chief justice Roberts to be impeached. Recall that many on the right already considered him to be a traitor when he was the deciding vote in the previous 5-4 ruling in favor of Obamacare. Republican presidential candidates will be obliged to express outrage and call for legislative repeal in order to appease their base.